Topeka — The Kansas Legislature on Friday approved the final state budget bill of the 2014 session and now will take the debate over taxes and spending to the voters.
The appropriations bill would provide $250 bonuses to state employees and reduce waiting lists for people with disabilities who need services.
But much of the debate Friday focused on whether Gov. Sam Brownback's cuts in state income tax rates are leading to reductions in revenues and, Democrats say, looming fiscal challenges.
"The grand experiment has failed," said state Sen. Tom Holland, D-Baldwin City, who ran and lost against Brownback in 2010. "The lab rat has died. Rigor mortis is setting in."
Republicans, who helped Brownback cut income tax rates and remove taxes for many businesses, described the Democratic criticisms as campaign rhetoric.
"This is all political wind," said Senate Ways and Means Chairman Ty Masterson, R-Andover. "What we have here is a budget. It is balanced," he said.
The measure was approved in the Senate 22-18 vote and in the House, 70-54. There were no Democratic votes for it. All members of the Douglas County delegation voted against the bill, which Brownback is expected to sign it into law.
Several hours after the House vote, the Legislature adjourned the wrap-up session shortly after 2 a.m. Saturday
The meatiest part of the state budget, which included funding for schools and higher education, had been completed last month during the regular session.
Arguments over the state's fiscal condition came after two rounds of bad news for Kansas during the wrap-up legislative session.
On Wednesday, the state reported it collected $93 million less in taxes than anticipated in April. Tax receipts for the current fiscal year are down 10 percent from the previous year while individual income tax collections have dropped 21 percent.
And on Thursday, Moody's Investor Service downgraded state bonds, citing the state’s sluggish economic recovery compared with peer states, the use of non-recurring measures to balance the budget and revenue reductions resulting from tax cuts.
According to Moody's, 15 states have the highest triple-A rating, while 14 states are at double-A1. Kansas was downgraded from double-A1 to double-A2. There are 13 states at that level, and the rest are lower.
The Brownback tax cuts will require harmful budget cuts, Democrats argued. House Minority Leader Paul Davis, D-Lawrence, has made the tax cuts a main part of his challenge to Brownback in the November election.
A new state general revenue fund profile that takes into account current spending commitments shows a deficit of $1.26 billion within 5 years. And that is without leaving any cash reserves or factoring another round of court-ordered school funding.
Since the state can't run a deficit, the funds would have to be made up through cuts, tax increases or a combination of both.
"It's a self-inflicted budget crisis that we have imposed on ourselves because of the income tax cuts," said Senate Minority Leader Anthony Hensley, D-Topeka.
Masterson said the fiscal challenges will be met.
He dismissed the general revenue fund profile, saying it is difficult to predict the future many years out.
"I'm not saying we don't have issues. We will deal with it," he said.
Some legislators said there is room to cut more from the budget.
State Sen. Steve Fitzgerald, R-Leavenworth, who voted against the bill, said, "We have excessive spending. We are taking too much from the private sector."
Kansas will spend approximately $14.6 billion in the fiscal year that starts July 1 from all funding sources, including nearly $6 billion in state tax collections.
In April, Brownback signed a $129 million school finance bill meant to address a Kansas Supreme Court ruling earlier in the year. The spending is aimed at equalizing state aid payments for poor school districts for operations and capital improvements.
During the budget debate Friday, a last-minute shift of $5 million in tobacco settlement funds that was initially supposed to go children's programs to the Kansas Bioscience Authority raised some protests.
“Once again, legislators are abandoning their promise to invest in Kansas children,” said April Holman, executive director of the Kansas Coalition for School Readiness. Republican budget leaders defended the shift, saying the KBA needed the funding to better develop the bioscience sector of the economy.